As it heads into its much-anticipated shareholders meeting Wednesday, Target Corp. said it is literally tearing down walls while building up its leadership to show that the company is on the mend.
In a memo sent to employees Monday, interim CEO John Mulligan said Target is moving its entire executive group to the 26th floor of its Minneapolis headquarters as it seeks to foster stronger collaboration among its top brass. It also said Tuesday that it hired a new chief information security officer to help shepherd its renewed mission to better protect consumer data.
“Thirty days ago, we promised to remove roadblocks, streamline decision making and generally make Target less bureaucratic. Since then, we’ve made real progress, and I’m excited to share a few highlights with you,” Mulligan told workers in the memo, which was obtained by the Star Tribune. “As we continue to focus on accelerating our transformation, everything matters — including what we call ourselves.”
To that end, Mulligan said Target is tossing out the term “executive committee” and will now call its group of executives a “leadership team.” The company is also modernizing or eliminating four long-standing governance meetings and will tear down its “vision, mission and values wall” in a headquarters space known called Target Hall. “We’ll modernize that space in the months ahead, and when it’s done, it will reflect the company we’re becoming, which we’re all creating together.”
Target also announced Tuesday that it has hired Brad Maiorino, the chief information security and technology risk officer for General Motors, as its chief information security officer. In March, Target announced that it had created this new position as a step toward beefing up data security.
Maiorino will report to Bob DeRodes, Target’s recently hired chief information officer. DeRodes replaced Beth Jacob, who resigned after Target’s data breach.
“Having led this critical function at two of the country’s largest companies, Brad is widely recognized as one of the nation’s top leaders in the complex, evolving areas of information security and risk,” DeRodes said in a statement.
The developments emerged just before Target’s shareholders meeting in Dallas on Wednesday, where several board members face being voted out after a scathing recommendation from an influential proxy advisory firm. Institutional Shareholder Services is urging that seven of Target’s 10 directors be ousted for failing to protect the company from the data breach.
While analysts welcomed the swift and transformative changes afoot at Target, some wondered whether the moves are more cosmetic than real — and what might result in new outcomes.
“I hope they’re not just playing musical chairs,” said Amy Koo, an analyst with Kantar Retail. “It’s hard to tell yet if it’s just smoke or if it’s actually action.”
In recent weeks, Mulligan has been more open in acknowledging that Target had become bogged down in bureaucracy and has been slow to roll out new initiatives. As the retailer looks to speed up innovation amid sluggish sales, the phrase “removing roadblocks” has become his new mantra.
Carol Spieckerman, president of retail consulting firm newmarketbuilders, said it seems like Target has hit a tipping point.
“Target has traditionally been a perfectionist,” she said. “It preferred to incubate ideas until they were pristine. But now they are realizing they can’t continue to operate that way. They’re going to have to get faster and to put more things out simultaneously even before they feel ready.”
On its first-quarter earnings calls last month, Target executives discussed some of the company’s newer initiatives, such as a test of same-day delivery, set to launch this month in Minneapolis, Boston and Miami. It’s also rolling out ship-from-store at 136 locations this fall as it looks to speed up standard shipping times. And it’s expanding the number of items eligible for its fairly new subscription service in which customers can regularly get certain products delivered to their homes.
Spieckerman added that former Target CEO Gregg Steinhafel had been talking about the trade-off between perfection and speed before he left. So the awareness that Target needed to do something has been there for a while, Spieckerman added.